Defence Minister David Johnston is not ruling out offering military assistance to US forces fighting what Prime Minister Tony Abbott says is an Islamic State (IS) "terrorist army" in Iraq.

Thousands of members of the Yazidi minority remain besieged by IS forces on Mount Sinjar, as the extremists press their assault across northern Iraq in the face of continuing US air strikes.

US and British aircraft have dropped relief supplies to the Yazidis, who face slaughter at the hands of the Islamists if they descend from the mountain, amid claims insurgents have already killed hundreds of Yazidis by burying them alive.

Iraqi human rights minister Mohammed Shia al-Sudani says the government has obtained images of "lines of dead Yazidis who have been shot in the head while the Islamic State fighters cheer and wave".

"The terrorist Islamic State has also taken at least 300 Yazidi women as slaves and locked some of them inside a police station in Sinjar."

Australia has agreed to send two Hercules transport planes to help airlift supplies, and this morning Senator Johnston said the Australian Defence Force could also offer military support.

"We're not ruling out providing some backup assistance to the Americans as they go in and deal kinetically with this terrorist organisation," he said.

"This terrorist organisation [Islamic State] is to be extremely feared and taken with great seriousness. We've seen atrocities, we've seen all manner of things. Who knows what the future holds with these people?

"The fact is this could turn very, very nasty in a very short space of time and I think anything's to be expected. And I don't believe right-minded countries can just sit back and watch atrocities unfold on their nightly television without taking some action.

"We are ready to assist in whatever way we can should we be asked to assist by the Americans and the Iraqi government.

But this afternoon, at a joint press conference with his US counterpart, defence secretary Chuck Hagel, Senator Johnston would not speculate on the possibility of military involvement.

"We don't telegraph our punches in any way, shape or form and there's been no request for us to participate in combat," he said.

"The situation for us at the moment is, we are committed to helping the Americans ... in providing humanitarian and disaster relief.

"Now, what the future holds in what is clearly a very troubled situation in Iraq, anybody can guess."

Now Hagel, who is in Australia for tomorrow's annual AUSMin talks, says the US air strikes which began last week to target IS have been successful.

"On the assessment of effectiveness of the airstrikes, they have been very effective from all reports that we've received on the ground," he said.

The two men will join Foreign Affairs Minister Julie Bishop and US secretary of state John Kerry in Sydney tomorrow for the Australia-United States ministerial consultations to discuss foreign, defence and other strategic policy matters.

"In terms of the unfolding tragedy which is occurring in Iraq, Labor is 100 per cent for supporting humanitarian relief to innocent civilians caught up in this crazed fighting by this very deadly group of fanatics in north-western Iraq," he said.

"But beyond that there's been no discussion about committing troops ... the Government has not spoken to Labor about that at all. When it comes to humanitarian relief, Labor is signed up for that, but there's been no discussion beyond that point."

Iraq's ambassador to Australia, Mouayed Saleh, says his country has not yet asked the Federal Government to send troops to the region, but will if the conflict escalates.

"We're going to be regularly assessing the situation, and if we need it ... who do we go to? To our friends and allies like Australia," he said.

Outgunned Kurds plead for more weapons

The leader of the Kurds in Iraq has pleaded with the West to send arms shipments to fend off IS fighters who are closing in on Erbil, the capital of Iraq's semi-autonomous Kurdish region and the site of a US consulate and a US-Iraqi joint military operations centre.

"This is now the biggest terrorist organisation we've ever seen with the most control, with the most money, getting more and more recruits," Barack Obama's former counter-terrorism head Michael Leiter said.

Mr Obama is under increasing pressure over the decision to launch limited airstrikes, with leading Republican hawk John McCain calling for air strikes to be expanded into Syria, which IS wants to include as part of its Islamic caliphate in the Middle East.

"They have erased the boundaries between Iraq and Syria," Senator McCain told CNN.

He said he would be providing "as much training and equipment" as he could to the Kurds and rushing equipment to Erbil.

"This is turning into - as we predicted for a long time - a regional conflict which does pose a threat to the security of the United States of America," Senator McCain said, calling Mr Obama's response to the Iraqi crisis "clearly very, very ineffective, to say the least".

Senator McCain said IS militants had attracted "young men from around the world" to fight on their side, with the movement "metasticising" throughout the region.

Failure to back Syrian rebels opened door to extremists: Clinton

Mr Obama also came under fire from his own side of politics, with Hillary Clinton blaming the rise of IS on failures of US policy.

Ms Clinton specifically faulted the US decision to stay on the sidelines of the insurgency against Syria's president Bashar al-Assad as opening the way for the most extreme rebel faction.

"The failure to help build up a credible fighting force of the people who were the originators of the protests against Assad - there were Islamists, there were secularists, there was everything in the middle - the failure to do that left a big vacuum, which the jihadists have now filled," Ms Clinton said.

Ms Clinton, widely considered an undeclared presidential candidate, was an unsuccessful advocate of arming the Syrian rebels when she was secretary of state during Mr Obama's first term.

One of the reasons why I worry about what's happening in the Middle East right now is because of the breakout capacity of jihadist groups that can affect Europe, can affect the United States

Hillary Clinton

She was interviewed before the US president's decision on Friday to order limited air strikes.

Ms Clinton, however, suggested in the interview that Mr Obama lacked a strategy for dealing with the jihadist threat.

"Great nations need organising principles, and 'Don't do stupid stuff' is not an organising principle," she said, referring to an Obama slogan.

She said the US must develop an "overarching" strategy to confront Islamist extremism, likening it to the long US struggle against Soviet-led communism.

Security forces flood Baghdad in stand-off between PM, president

Iraqi police, army and counter-terrorism forces were deployed in unusually high numbers across strategic locations in Baghdad overnight, security sources said Monday.

"There is a huge security presence, police and army, especially around the Green Zone," the highly protected district that houses Iraq's key institutions, a high-ranking police officer said.

He said the deployment started just 90 minutes before prime minister Nouri al-Maliki announced on state television he would file a complaint against the president for violating the constitution.

Serving in a caretaker capacity since an inconclusive election in April, Mr Maliki has defied calls by Sunnis, Kurds, some fellow Shiites, regional power broker Iran and Iraq's top cleric to step aside for a less polarising figure.

A bloc comprising Iraq's biggest Shiite parties is close to nominating a prime minister, the deputy speaker of parliament said, directly challenging Mr Maliki who has refused to give up his bid for a third term.

"There is security everywhere in Baghdad, these are very unusual measures that look like those we impose for a state of emergency," the police official said.

"Several streets have been closed ... as well as some key bridges," said an official at the interior ministry.

"It's all linked to the political situation."

Mr Obama has urged Iraqi politicians to form a more inclusive government that can counter the growing threat from the Islamic State.